Er.energyNP@Gmail.com

Four of nine hydropower projects financed by commercial banks of Nepal have been severely damaged by the August 26 Bhotekoshi–Trishuli flood, putting Rs 7.5 billion in bank investment at risk.

According to the Nepal Bankers’ Association (NBA), the Mailung Khola (5 MW), Langtang Khola (20 MW), Rasuwagadhi (111 MW), and Upper Trishuli-3B (37 MW) projects sustained major damage. The remaining five projects - Super Trishuli, Upper Mailung ‘A’, Salasungi, Hira Ratna, and Prime Hydro - were not directly damaged, though electricity sales from Salasungi have been halted after the flood destroyed its transmission line.

Hydropower projects funded by the government, Nepal Electricity Authority (NEA), Employees Provident Fund, and Citizens Investment Fund have been even more severely affected.

Among the damaged projects, three banks - Laxmi Sunrise Bank, Siddhartha Bank, and Kumari Bank - collectively invested Rs 4 billion in the Langtang Khola Hydropower Project in Rasuwa. Similarly, three banks and financial institutions financed Upper Trishuli-3B, with a total investment agreement of Rs 5.76 billion. Led by Nabil Bank, the Hydropower Investment and Development Company and Nepal Bank signed loan agreements, while NEA and Nepal Telecom invested Rs 2.46 billion in the project.

The 111 MW Rasuwagadhi Hydropower Project was completely devastated by last week’s flood. Nabil Bank and Kumari Bank had previously extended emergency loans after the project was damaged by floods last year. Chilime Hydropower Project, a subsidiary of NEA, is the major promoter. Kumari Bank provided Rs 2 billion in loans, while Nabil Bank financed Rs 498 million for reconstruction and maintenance.

NMB Bank is the main investor in the Mailung Khola Hydropower Project, which was also damaged. With co-financing from Global IME Bank, the two banks invested Rs 270 million in the project.

Meanwhile, electricity distribution from the 78 MW Salasungi Hydropower Plant has been halted due to the collapse of its transmission line. Although the plant itself was not damaged, the project - led by Nepal Investment Mega Bank and financed by Kumari Bank and Citizens Bank - had secured Rs 9.53 billion in loans.

Beyond hydropower, banks have also extended Rs 2.5 billion in loans to residents and enterprises in flood-affected Rasuwa, Nuwakot, and Dhading districts. In total, the banking sector faces risks amounting to Rs 10 billion from the disaster.